What's the current scandal?

A record £290m fine imposed on Barclays for attempting to manipulate the price of a crucial interest rate known as Libor – the London interbank offered rate – and its European equivalent Euribor – has raised the prospect that the entire market has been rigged since as long ago as 2005.

Barclays' fine covers two main offences: the first, that traders helped each other out by fiddling the rates they reported to the British Bankers Association from about 2005; the second, that Barclays massaged its submissions lower during the banking crisis in 2008, to protect the bank's public image and prevent the government stepping in to rescue it.

When the regulators – the Financial Services Authority in the UK, and in the US the commodity futures trading commission and the department of justice – published their findings, they made it clear that Barclays was just one of the banks under investigation. As as many as 20 others are co-operating with the authorities.

Tracey McDermott, the FSA's acting head of enforcement, says that a "number of other significant cross-border investigations in this area," were under way involving other banks. "The action against Barclays should leave firms in no doubt about the serious consequences of this type of failure," she says.

This has sparked speculation that the fine against Barclays – the biggest sanction ever announced by the FSA, whose portion of the fine was £59.5m – could prove to be one of the smallest when the investigations are completed.

Deutsche Bank became the latest to see its name linked with Libor-fixing on Friday, when the German financial regulator, Bafin, was revealed to be investigating it. Shares in the German bank fell although it had already admitted that it had been subpoenaed by a number of authorities in Europe and the US earlier in the year.

As more findings emerge over the coming months, the public is likely to be left with the impression of an entire industry rife with what ex-Barclays boss Bob Diamond repeatedly told MPs last week was, "reprehensible behaviour".

The scandal is only the latest to hit banking, which has been riddled with controversy about tax avoidance, bumper bonuses, and mis-selling financial products such as payment protection insurance, and interest rate swaps to small businesses. And that is even before the discrepancy between big City pay packets and those outside the financial sector is considered.

What's happened to the perpetrators?

Some 14 Barclays traders were mentioned, although not identified, in the regulatory documents. Chief executive Bob Diamond quit last Tuesday, the day before he appeared before MPs and told them last week that while he was not aware that he personally was being investigated. "I understand that there will be follow-up criminal investigations on certain individuals … we are certainly not going to stand in the way of it". He made it clear that he accepted accountability but not culpability for the events outlined by the regulators.

The Serious Fraud Office announced on Friday that it had "decided formally to accept the Libor matter for investigation", but the City watchdog has had long-standing problems of lack of resources and failed probes – including a recent run-in with the property tycoon Vincent Tchenguiz.

Diamond's close colleague Jerry del Missier also quit last week, barely a fortnight after being promoted from co-head of the investment bank Barclays Capital to chief operating officer of the entire bank, moving from the US to London to take up the position. The bank said del Missier had been investigated by the FSA and cleared. Barclays' chairman Marcus Agius will also leave, once a successor to Diamond has been found.

At other banks, with the investigation continuing, some staff have already gone. Four people have left Royal Bank of Scotland, for instance, and handfuls of traders have parted from other firms, although it could be months until the final tally of potential perpetrators is known.

Parliament will continue its investigation of the background to the case this week, with Agius, and Bank of England deputy governor Paul Tucker appearing before the Treasury select committee which took evidence from Diamond last week.

The FSA's chairman Lord Turner has also been put on notice that his attendance may be required before the committee.

How's the industry's public image?

In the torrid days that followed the financial crisis, bank bosses seemed blind to the public furore that followed the multibillion-pound rescue of the sector by taxpayers and the Bank of England.

More recently, bankers have realised there is an image problem. The Libor scandal has thrown dynamite on an industry whose image was tarnished by rocketing pay deals and the swashbuckling attitude of its traders, and politicians of all parties have competed to prove that they would like to see the industry brought to book, taking big bets on financial markets.

Diamond tried hard to present Barclays as a good corporate citizen; and the bank spends millions of pounds on advertising and sponsorship – backing such as of football's Premier League, to bolster its PR credentials.

What's the reality?

Diamond argued to MPs that the offences that led to the fine took place among a handful of staff in an organisation that employs 144,000.

Staff in Barclays high-street banking business are on far lower salaries, and work in an atmosphere that could not be further from the cut-and-thrust of the trading floor.

But mis-selling scandals such as PPI mean that even the high-street arms of banks have marred their reputations – and that was before the IT crisis that hit RBS last month. Up to 13m customers of the group, which includes NatWest, were unable to use their accounts for up to 10 days, and in the case of its Ulster Bank arm the problem will not be fixed until next week – a whole month of computer chaos.

Stephen Hester, the RBS chief executive, apologised to the bank's exasperated customers, and said he would not be taking his bonus for a second successive year – having waived a £963,000 payment in January under pressure from the public although it remains to be seen whether this will be enough to placate customers.

What is the UK doing about it?

The immediate political fallout of the Libor crisis is the creation of a cross-party committee, chaired by Tory MP Andrew Tyrie, which will look at the wider issue of the culture and practices in the banking sector during what George Osborne has called the "age of irresponsibility". There are still calls by Labour for a full-blown public inquiry, although efforts to push this through the Commons failed this week after a rowdy debate by MPs. The FSA would stress that it has worked with international regulatory bodies and has been co-ordinating with the Serious Fraud Office over the Libor affair.

More broadly, the coalition has attempted to change the entire way the City is regulated. The FSA will be shut next year, with banking regulation moving to a subsidiary of the Bank of England and consumer regulation being handled by a new body. The requirement of banks to ringfence their high street operations from investment banks is also intended to tackle systemic risk – although this does not need to be implemented until 2019. Jill Treanor